Check the build­ing war­ranty when you buy a new house

Yorkshire Post - Property - - PROPERTY - John Rob­son

you are look­ing to buy is rare but does hap­pen.

The sale con­tract pre­pared by the de­vel­oper’s con­veyancer should pro­vide for the prop­erty to carry the ben­e­fit of the NHBC scheme and this is sup­ported by the fact NHBC doc­u­men­ta­tion has been pro­vided by them to your con­veyancer. The doc­u­men­ta­tion is known as the Build­mark Cover and will de­tail the name of the de­vel­oper or de­vel­oper com­pany who reg­is­tered the prop­erty with NHBC at the out­set, prior to the com­mence­ment of con­struc­tion.

This part of the doc­u­men­ta­tion is is­sued be­fore struc­tural com­ple­tion and many con­veyancers do not make any fur­ther checks un­til the Cover Note and Ac­cep­tance doc­u­ments are is­sued. Th­ese doc­u­ments will only be is­sued once the prop­erty is fully built and has been fi­nally in­spected by the NHBC sur­veyor.

It is im­por­tant to check that the reg­is­tered de­vel­oper is still cur­rent on the NHBC reg­is­ter and this is clearly the ac­tion your con­veyancer has taken.

If they are not on the cur­rent reg­is­ter then NHBC will not of­fer the cover and the war­ranty will not be avail­able. There are a num­ber of rea­sons why the cur­rent de­vel­oper may have been re­moved from the reg­is­ter such as sub-stan­dard work­man­ship, non pay­ment of NHBC fees etc. The tim­ing is cru­cial as they have left the reg­is­ter af­ter the house build­ing com­menced and pos­si­bly com­pleted but prior to ex­change of con­tracts.

How­ever, the de­vel­oper is un­der a duty to dis­close the change in cir­cum­stances and the un­avail­abil­ity of the NHBC war­ranty to his con­veyancer as they can­not con­tract with you to sell the prop­erty with NHBC cover.

Re­search car­ried out in 2010 de­ter­mined that more than 50 per cent of buyer’s con­veyancers did not ver­ify if the de­vel­oper was cur­rently NHBC reg­is­tered just prior to the ex­change of con­tracts. Your con­veyancer has been dili­gent and has fol­lowed the rel­e­vant guide­lines.

If the de­vel­oper leaves the NHBC reg­is­ter af­ter ex­change of con­tracts but prior to com­ple­tion, NHBC are only obliged to pro­vide the ben­e­fits listed in sec­tion 1 of the Build­mark Cover.

They will nor­mally ei­ther pay to com­plete the build­ing or re­fund the de­posit paid. There are lim­ited op­tions; The seller should be asked to ex­plain the cur­rent is­sues and to re­in­state with NHBC or to pro­vide cover from an alternative war­ranty provider. This may be costly as the pre­mium charged by a new provider to carry out an in­spec­tion and pro­vide a war­ranty will be hefty.

There are only a lim­ited num­ber of com­pa­nies pre­pared to pro­vide this ret­ro­spec­tive war­ranty. In­dem­nity in­surance is not nor­mally avail­able as the house is less than 12 months old.

With­out an ac­cept­able war­ranty or ar­chi­tect’s cer­tifi­cate, lenders will not pro­vide a mort­gage over the prop­erty.

John Rob­son is res­i­den­tial con­veyanc­ing man­ager at Ford & War­ren, Leeds.

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